Waha Capital reports Q1 2023 net profit of AED 148 million on sustained outperformance by its capital markets funds

Key highlights

Public Markets business generates net profit of AED 226 million, driven by the strong performance of its Waha MENA Equity Fund 

Private Investments business records net loss of AED 23 million, due to unrealised revaluation losses on portfolio assets

Waha Land reports AED 8 million in net profit

Abu Dhabi, 11 May 2023: Waha Capital PJSC, an Abu Dhabi-listed investment management company (ADX: WAHA), reported net profit of AED 148 million for Q1 2023, equating to a return on equity of 8.1%. This strong performance was driven by the exceptional returns delivered by credit and equity funds in its Public Markets business. 

The company recorded total revenue of AED 242 million in the first quarter, compared to AED 278 million a year earlier. Total expenses increased 32% year-on-year to AED 62 million, while a higher interest rate environment led to finance costs increasing to AED 32 million from AED 26 million in Q1 2022.

Waha Investment (previously referred to as Public Markets) which actively manages emerging markets credit and equity funds, reported net investment returns of AED 238 million and net profit of AED 226 million for the first three months of 2023. The Private Investments business, which pursues a multi-asset investment approach across different sectors and geographies, recorded net investment returns of AED 18 million but net loss of AED 23 million, due to mark-to-market losses on certain portfolio assets. Meanwhile, Waha Land generated net investment returns of AED 12 million and net profit of AED 8 million.

Waha Capital’s total assets under management (AUM) stood at AED 8.6 billion at the end of March 31, 2023.

Public Markets Highlights

The Public Markets business (operated by Waha Investment PrJSC, a wholly owned subsidiary) which actively manages emerging markets credit and equity funds, recorded total revenue of AED 238 million in the first quarter of 2023, and net income totalling AED 226 million. Our flagship credit and equity funds produced positive returns despite continued volatility in global markets, continuing their exceptional multi-year track record of outperformance.

The Waha MENA Equity Fund achieved a total return of 4.6% versus -0.5% by its benchmark. The fund has delivered a cumulative return of 299.1% since its inception in 2014, versus the S&P Pan Arab Composite Index’s return of 58.8%.

The Waha CEEMEA Credit Fund, which pursues long-short fixed income strategies in emerging markets, recorded a total return of 2.7%, in line with its benchmark. The fund has delivered a cumulative return of 186.0% since its inception in 2012, versus the JPMorgan CEEMEA CEMB Index’s return of 40.4%.

The Waha Islamic Income Fund delivered a total return of 1.8% (gross of fees) versus a benchmark return of 1.9%. The fund, which mainly invests in global sukuk and Shari’ah-compliant equities, has recorded a cumulative return of 17.1% (gross of fees), since its inception in 2020.

During the quarter, Waha Investment was mandated to manage AED 1.8 billion for an institutional client, bringing total assets under management to AED 6.9 billion from AED 4.5 billion a year earlier.

Private Investments Highlights

The Private Investments business, which pursues a multi-asset investment approach across different sectors and geographies, recorded net loss of AED 23 million in the first three months of 2023, largely due to fair value adjustments on certain assets that have been affected by turbulent global markets.

The business, which had AED 900 million of assets under management at the end of the first quarter, continues to deploy and recycle capital across its portfolios, generating AED 16 million in cash.

Waha Land Highlights

Waha Land, a wholly-owned subsidiary that develops, owns, and operates light industrial real estate assets, recorded total revenue of AED 12 million in the first three months of 2023, driven by steady rental income.

Waha Land’s planned AED 555 million sale of 17 leased warehouse buildings at the ALMARKAZ Industrial Development, agreed with Peninsula Real Estate Management Limited in August 2022, is expected to close later in 2023.

Following completion of the transaction, Waha Land will continue to focus on developing, leasing, and monetising assets at ALMARKAZ. Peninsula has agreed to acquire an additional 136,000 sq.m of completed and income producing industrial properties that Waha Land is currently developing, with leasing expected to commence once construction is completed.

Ahmed Khalifa Al Mansoori, Chief Operating Officer of Waha Capital: “Waha Capital’s Q1 2023 results demonstrate a strong start to the year and highlights our ability to generate healthy returns despite ongoing global macroeconomic uncertainty. Our assets under management (AUM) have grown significantly, reaching AED 8.6 billion as of Q1 2023, up from AED 6.5 billion at the end of 2022. This impressive growth is a result of the trust that our investors have in our ability to generate solid returns, even amid global macroeconomic uncertainty.

Our public markets’ credit and equity funds have once again delivered exceptional performance, generating robust returns for the company and our third-party investors. During the first quarter, we recorded significant capital inflows to our funds and managed accounts, a testament to the confidence that major institutional investors have in our offering. With third-party assets under management now exceeding AED 3.9 billion, we have a solid foundation to expand our product range and increase our fee income. Despite the challenging operating environment, our Private Investments portfolio is based on resilient fundamentals, and we are confident that the team’s experience and expertise will continue to deliver long-term value to our stakeholders.”